Response

Acrylonitrile Methodology Consultation – Summary of responses

Following the recent announcement that ICIS would be launching a formal methodology consultation process, we have received a number of responses from key market players. To read the anonymised public responses please click on the links below.

ICIS received in total 5 responses to the Acrylonitrile Methodology Consultation.

ICIS Initial Decision

There were five responses to the global consultation, and they were all about Europe.

ICIS will reduce the delivery timing for the spot assessment from 60-90 days after bill of lading date. There was a general preference for restricting the spot delivery terms to the current month, although respondents were not clear whether this should be for loading or delivery. The new terms will be confirmed by the end of May 2014 (see Final Decision below).

One respondent requested the inclusion of a new assessment for acrylonitrile with purity of less than 99.85%. This will be researched, with particular regard to whether this assessment would be sustainable on a weekly basis. A decision will be communicated by the end of May 2014 (see Final Decision below).

One respondent requested the exclusion of co-producer deals. This is not in line with ICIS methodology, which includes all confirmed deals, but which are still subject to editorial judgment. Genuine co-producer deals, for example during shutdowns, will generally be included.

Two respondents requested the separation of the contract price assessment into two assessments: T1 contract and T2 contract. This would not be practicable since all assessed contract business is T2.

The same two respondents proposed the division of the spot assessments into T1 and T2. This will be researched, with a final decision by the end of May 2014, and with particular regard to whether this assessment would be sustainable on a weekly basis.

A number of methodology clarifications were requested:

Western Europe (WE) spot deals will be redefined in the methodology document as: Northwest Europe (NWE), Mediterranean and Turkey. This will formalise the standing practice used by the industry in recent years. There was also a request for an export assessment.

The standard ICIS definition of NWE and Mediterranean are stated in the ICIS General Methodology document: http://www.icis.com/about/methodology/general/

The same will apply to the distinction between T1 and T2 product, as defined in the ICIS glossary: T1 being non-EU product; T2 being EU product or origins given T2 status. See the ICIS Glossary: http://www.icis.com/about/glossary/

Contract and spot definitions are also in line with the standard ICIS glossary: http://www.icis.com/about/glossary/ One suggestion, to keep the spot assessment for inter-trade deals alone, would not be in line with the ICIS spot assessment definition.

Spot and contract price assessments are ranges from low to high, in line with standard ICIS editorial policy. Assessments are not weighted averages, unless otherwise stated.

Regarding the coverage of swaps, these will always be reported in the commentary.

ICIS Final Decision

ICIS will restrict the spot assessment delivery terms to the current month. The Europe spot assessment will be comprised of deals for delivery in the current month, apart from the final week of the month when the assessment will be comprised of deals for the following month. In the absence of deals, this will be comprised of bids, offers or price ideas. This will take effect from the report of Friday 6 June 2014.

ICIS will not add a new assessment for acrylonitrile with purity of less than 99.85% or divide the spot assessment into T1 and T2, because there would not be sufficient price points to make this assessment sustainable on a weekly basis.

To provide further comments or feedback on the ICIS acrylonitrile methodology, please contact:

Barbara Ortner: Barbara.Ortner@icis.com

This document is not open for consultation